Moving Average Support and Resistance Levels

Moving Averages can be used as points of support and resistance on charts.

When price reaches the moving average, the Moving Average level can act as a point of support or resistance for the price.

Buy Oil Signal

If price is on an upward trend & starts to retrace, then most traders might wait to buy at a better price when the price hits a support level. Traders will sometimes use the Moving Average to determine the support level.

A buy signal is generated when price hits the Moving Average, turns and starts moving in the upward trend direction. The signal is confirmed when price closes above the MA. Because many traders use the moving averages to generate signals, price will normally react to these levels.

A stoploss should be set just below the Moving Average Indicator. Ideally it should be set a few pips below the previous low.

Buy Oil Signal - How to Trade Oil with Moving Average Strategy Method

Sell Signal

If the price is on a downward trend & starts to retrace, then most traders might wait to sell at a better price when the price hits a resistance level. Traders will sometimes use the Moving Average to determine the resistance level.

A sell signal is generated when price hits the Moving Average, turns and starts moving in the downward trend direction. The signal is confirmed when price closes below the MA. Because many traders use the moving averages to generate signals, price will normally react to these levels.

A stoploss should be set just above the moving average indicator. Ideally it should be set a few pips above the previous high.

Sell Signal - How to Trade Oil with Moving Average Strategy Method

Resistance Level turns Support Level

In Oil Trading - When a resistance level is broken it turns into support and vice versa.

This happens when the fundamentals of a trend change and consequently the direction of a crude oil. Direction change is reflected by the moving average indicator, the direction is confirmed when resistance zone turns into support area or vice versa (when support level turns into resistance level)

Resistance Level turns Support Level - Moving Average Strategy Method Example